Financing for Meritorious Commercial Disputes
Many companies and institutions with meritorious legal claims find the costs associated with pursuing litigation prohibitive. Or they feel that the uncertainty and financial risks involved with these claims are too great.
For counsel, there are times when an engagement must be declined and an opportunity missed to further a client relationship because satisfactory financial arrangements cannot be achieved.
About Litigation Financing
Litigation financing (also known as litigation funding, legal financing, legal funding, third party litigation funding or alternative litigation financing) is defined as the process in which a third-party company provides advanced capital to cover litigation costs in exchange for a return on any judgment or settlement.
Litigation financing is not a loan. Loans, by definition, are recoverable. Alternative Litigation financing is a form of non-recourse debt. If the client fails to obtain a recovery, it does not have to repay the funds advanced. It is only when the client is successful in obtaining a settlement or a damages award that the third-party financier is entitled to recoup their costs and share in the proceeds.
Third-Party Litigation financing is a growing phenomenon in the United States. While in earlier times these financial activities were forbidden by medieval Anglo-Saxon legal doctrines, today, these arrangements are allowed in a majority of jurisdictions in the United States, as well as in Canada, Australia, the UK, and many EU countries.
Risk Evaluation & Management
In order to effectively evaluate and manage your litigation risks, VLF employs a thorough, multi-phase underwriting process.
The first step in the process is a preliminary assessment of your claim. This is a brief, initial review undertaken by our Director of Legal Services to verify that the basic characteristics of the claim (i.e., subject matter, potential damages, court jurisdiction, etc.) fit with our investment profile.
After completing our initial review of your claim, and determining that it is consistent with the type of matters we consider for funding, we will then undertake a comprehensive risk analysis of the matter using the VLF Evaluation ProtocolSM.
This proprietary technology provides us with an objective, scientific and rigorous evaluation of your claim. The results of the VLF Evaluation ProtocolSM give us a quantitative metric that will determine if the perceived merits of your claim and the potential for obtaining a successful recovery meet our investment parameters.
Investment Committee Review
Should our underwriting efforts indicate that a favorable result is likely, a recommendation for funding your claim will be made to our Investment Committee. The Investment Committee is an independent body comprised of distinguished professionals. They have been selected on the basis of their recognized judgment, integrity and expertise in the risk management, legal, financial and insurance industries. Their mandate is to provide unbiased, objective opinions regarding the suitability and prospects of commercial claims that we consider for financing.
Upon receiving approval from our Investment Committee to fund your case, we will finalize the terms, conditions and financing structures for the prosecution of your claim.
Importantly, VLF approaches litigation finance from a dispute resolution management perspective. We work closely with our clients and their trial counsel to establish litigation management plans and budgets that seek to promote efficient practices for obtaining a satisfactory result and that align the interests of the client, their lawyers and VLF. And because of our unique and extensive experience in the legal services industry, we can provide you with assistance throughout every phase of litigation.
VLF is uniquely positioned to offer clients the opportunity to:
- Identify commercial claims that represent valuable assets
- Initiate and pursue meritorious cases
- Mitigate the financial risks associated with the prosecution of legal claims
- Free-up working capital to allocate to core business activities rather than legal budgets
- Provide the means to retain effective counsel
For outside counsel, VLF’s funding capabilities can:
- Help you maintain, grow or establish client relationships
- Provide access to new client opportunities
- Absorb the financial risks inherent in contingency fee matters
- Diversify the fee arrangements in your portfolio of cases
- Offer guaranteed revenue
- Provide attractive incentives for efficient resolution practices
How We Can Help
Vinson Litigation Finance (VLF) is a Litigation Finance Company. The focus of our business is to assist clients in resolving legitimate and meritorious commercial disputes. Our business model is based on two key components:
- Conducting a thorough evaluation of your claims
- Providing capital to fund the costs of your litigation
Leveraging 40 years of experience in the evaluation of commercial litigation, we have developed the VLF Evaluation ProtocolSM. This proprietary technology provides an objective assessment of the risks of pursuing litigation and the potential for obtaining a favorable outcome.
No other organization possesses the technology, the data, or the systems for conducting this type of analysis. With these risk analysis technologies, we have attracted significant capital investments that we direct to clients for the prosecution of matters that meet our strict funding criteria.
Added-value Early Case Assessment
Clients who obtain 3rd party litigation financing through VLF are provided with an early case assessment report via our partnership with the leading jury consulting firm of Vinson & Company.
This reporting offers exceptional added value to litigants and their counsel, delivering a detailed and objective analysis of juror perceptions regarding case strengths and vulnerabilities.
Insights contained in this work product can be used to:
- Guide the discovery process
- Develop trial strategy
- Understand prevailing attitudes, experiences and biases
- Assess settlement proposals
No other alternative litigation funding organization offers this type of added-value assessment.
If you have a claim that you would like VLF to look at, please contact us HERE or call 310-531-1700
Financing Structures & Conditions
VLF's funding relationships are flexible. We are able to structure a financing agreement that is best suited for the type of claim being pursued and our clients' needs. The nature of the case, the venue, the likely length of the litigation, the attorneys’ rates, expert fees, and other factors all have to be considered when arranging an optimal financing package. VLF seeks to put in place an overall financing structure that maximizes efficiency, rewards efficacy and aligns our interests with those of the client and the handling attorney. Once your matter has been approved for financing, funds will be released according to the budget and spending plans agreed to in advance.
Conditions for Our Financing
All decisions regarding the prosecution of your claim are left to you and your attorney. However, given that we will bear all (or a substantial portion) of the financial risk, but will only share in the upside recovery, we want to ensure that the case is prosecuted in ways that maximize efficiencies and economic returns to both of us. Therefore, you and your attorneys must be willing to keep us apprised of and consider in good faith our input on:
- Changes in trial counsel
- Trial management plans
- Financial budgets
- Performance standards
- The retention of experts, trial consultants and other litigation support vendors
- Settlement offers, demands, discussions and negotiations
During the course of your litigation, we will observe the progress of the case; monitor and evaluate trial counsel regarding adherence to case management plans and budgets; and consult with you and your attorneys regarding significant case developments and settlement discussions. Our involvement in an advisory capacity is an additional benefit to you given our extensive experience in evaluating litigation. We will be looking out for your interests as well as ours.
To download information about VLF financing, click here.